CONSECO FILES REORGANISATION PLAN

Indiana-based insurance holding company Conseco plans to re-emerge from bankruptcy by mid-year, according to a reorganisation plan filed with a US bankruptcy court in Chicago. Under the plan, lender banks and bondholders are the creditors first in line to recover their investments in Conseco. The company filed for chapter 11 bankruptcy protection last December, becoming the third-largest US corporation to make such a filing. Conseco was forced into the move after amassing an unwieldy $6.5bn debt load during a 1990s buying spree. About $2.5bn in debt is held by bondholders and $1.5bn is owed to banks. The reorganisation plan is designed to reduce the group’s debt load to $1.4bn, with bondholders swapping their debt for equity and banks swapping their debt for warrants. Conseco has not yet reached an agreement with holders of trust-preferred securities, which hold another $2bn in Conseco debt. Another pending element in the reorganisation is the sale of assets by Conseco’s finance unit, with those proceeds also to be used to pay off debt.